A JOINT EFFORT ALWAYS GOOD FOR TAKING A JOINT HOME LOAN.

A home is a ‘once-in-a-lifetime’ investment for many of us. Henceforth, we have seen an increasing trend wherein people are opting for joint home loans so that they can realize this dream.

Why is it the best option ?

vEligibility for higher loan amount by adding up income of all the joint applicants;

vApplicants would have the option of higher tax benefits independently. Under section 80C of Income Tax Act (ITA), all the applicants to the loan are independently eligible for claiming principal deduction to a maximum extent of Rs.1.50 lakh and under section 24(b) of ITA, all the applicants are also eligible for claiming interest deduction to the extent of Rs 2 lakh, as per their ownership;

vWith tenure of loan being longer, in the event of any uncertainties, risk mitigation is also ensured.

vSome lenders offer lower interest rates for women applicants wherein the applicant might be a sole owner or joint owner of the property.

JOINT INCOME, INCREASED ELIGIBILITY:

You can apply for a joint home loan with your spouse, parent, child or sibling. There is no cap on the number of applicants; a minimum of two persons to a maximum of six or seven can apply jointly for a home loan. All members of a family can be applicants and eligibility increases if all of them have income.”

LOAN TENURE:

Loan tenure is different for various categories of borrowers and can range from 10 to 30 years. When the co-borrower is a spouse, the tenure can be a maximum of 25 years, depending on the retirement age of the older co-borrower. “Eight years ago, I took a joint home loan from a nationalized bank with my wife. Since my spouse had no income, as a co-borrower I have been paying the EMIs with a fixed interest rate of 7.5 percent, that works well for me during market fluctuations.”

CO-BORROWER OR CO-OWNER

If you are the main applicant, the person or persons with whom you avail the home loan jointly are the co-borrowers. “Co-borrowers need not be co-owners in the said property but all co-owners of the property have to be joint borrowers. The maximum tenure some offer for a joint home loan is 30 years depending on the age of borrowers, their profile and creditworthiness.”

üDOCUMENTS REQUIRED:

All the applicants,whether salaried, self-employed or non-employed, need to submit the necessary know your-customer (KYC) documents that include ID proof, address proof,

Finance experts advise that it is prudent to sign a memorandum of understanding (MOU) among the co-borrowers on each one’s share of the home loan repayment amount as well as that of the property, to avoid any future misunderstanding. Postdated cheques (PDCs) can be issued from either a single or a joint bank account. The Co-borrowers can also share the number of EMIs among them, with a specific number of cheques issued by one borrower and the balance by the others.

TAX BOON:

To claim maximum individual tax benefits, each co-borrower of the home loan should also be a co-owner. Also, there should be no change in the pattern of the repayment ratio even when one of the co-borrowers is unable to repay his/her share of the EMI due to certain reasons such as job loss, illness, etc. To continue availing the tax benefits in troubled times, borrowing a soft loan from friends or relatives is a sensible move.